India: Analysis Of Recent Employment And Labour Law Cases

This Case Update provides a brief analysis of the recent
judicial decisions delivered by the Supreme Court of India (SC) and
High Court of Bombay, on certain labour and employment matters
pertaining to maternity / paternity leave in surrogacy cases, wage
claims by absentee employees and communication of performance
appraisals to concerned employees.

Surrogate Parents are entitled to Maternity and Paternity
Leave

In Dr Pooja Jignesh Doshi v. The State of Maharashtra and
Another [Writ Petition No. 1665 of 2015, decided on 3 July
2019], the division bench of High Court of Bombay (Court)
reiterated that even in case of birth of a child by surrogacy, the
parents who have lent the ova and sperm, would be entitled to
maternity leave and paternity leave, respectively. The Court
reiterated the law laid down by the division bench of the Court in
Dr Mrs Hema Vijay Menon v. State of Maharashtra [Writ Petition
No.3288, decided on 22 July 2015].

Comment: The above cases dealt with matters arising
prior to 1 April 2017, at which time the government, by way of
Maternity Benefit (Amendment) Act, 2017 (effective from 1 April
2017), introduced an explicit provision in the Maternity Benefit
Act,1961, providing that even a commissioning mother (i.e. a
biological mother who uses her egg to create an embryo implanted in
any other woman) shall be entitled to paid maternity leave of 12
weeks from the date the child is handed over to the commissioning
mother. Further, the High Court of Bombay has also held that a
commissioning father is also entitled to paternity leave. As of
date, paternity leave is not statutorily provided in India, and is
largely discretionary.

Clarification on No-work No-Pay Principle

In the case of Chief Regional Manager, United India
Insurance Company Limited v. Siraj Uddin Khan [Civil Appeal No.
5390 of 2019, decided on 11 July 2019], the SC has reiterated
that no individual can claim wages for the period that he/she
remained absent without leave or justification.

In the present case, the Respondent was relieved from the
Allahabad branch of the Appellant to join the Jaunpur branch of the
Appellant. However, the Respondent did not join the Jaunpur branch
on the assigned date and was unauthorizedly absent from work for
four months. Disciplinary enquiry was conducted against the
Respondent and an order for reduction of basic pay by two steps was
passed in May 2009. However, the Respondent continued to be absent
from work until 2012. Consequently, the Appellant passed an order
in June 2012, terminating the services of the Respondent. The
Respondent preferred a series of writ petitions before the High
Court of Allahabad against the above-mentioned orders. The High
Court of Allahabad quashed the above-mentioned orders citing
procedural lapses in the conduct of disciplinary enquiry, without
specially directing the Appellant to provide back wages to the
Respondent from 2009-2012. Upon refusal of the Appellant to pay
back wages from 2009 - 2012, the Respondent filed another writ
petition before the High Court of Allahabad. The High Court of
Allahabad directed the Appellant to pay salary for the period 2009
- 2012, along with 18% interest. The Appellant preferred the
present appeal before the SC against this order of the High Court
of Allahabad.

The two-judge bench of the SC held that, setting aside of the
termination order does not automatically entitle the Respondent to
the salary for the period 2009 - 2012. The SC differentiated the
present case from a situation where an employee was dismissed from
service and when such dismissal was set aside, he would
automatically be entitled for back wages. The SC noted that since
the Respondent was not kept away from the work on account of
dismissal or by any order of the Appellant, the Respondent was not
eligible to claim arrears of wages. Therefore, the SC partly
allowed the appeal and directed the Appellant to consider the claim
of back wages of the Respondent and pass appropriate orders with
reasons.

Comment: While the SC in this case did not conclusively
determine whether the Respondent was eligible for wages or not, it
referred to judicial precedents dealing with the principle of
'no work no pay'. The SC referred to the decision of the SC
in Airports Authority of India and Others v. Shambhu Nath Das
[(2008) 11 SCC 498] wherein it was held that if a person was
absent from work without authorized leave or valid justification,
he would not be eligible for wages for that period. On the other
hand, the SC has also referred to the judgement of Shobha Ram
Raturi v. Haryana Vidyut Prasaran Nigam Limited and Others [(2016)
16 SCC 663] wherein the SC held that where an employer has
restrained the employee from working, the employer cannot plead
'no work no pay'. Therefore, the SC has attempted to
reiterate that the principle of 'no work no pay' applies
only in instances where the employee has voluntarily absented
himself from work, and not where the employer has restrained the
employee from attending work.

Mandatory Communication of Annual Performance Appraisal Reports
to Public Servants

In Pankaj Prakash v. United India Insurance Company Limited
and Another [Civil Appeal No. 5340-5341 of 2019, decided on 10 July
2019], the SC held that all public servants are entitled to
know their grades in an annual performance appraisal report
(APAR).

The Appellant was aggrieved by the fact that the entries in his
APAR for two years were not disclosed, as a result of which he was
unable to submit a representation for promotion at the particular
time. The Appellant filled a writ petition before the High Court of
Allahabad against such action of the employer i.e. Respondent. The
High Court of Allahabad held that in the absence of an adverse
entry or an entry below the benchmark, the failure to communicate
the grade in an APAR did not result in an actionable grievance. The
Appellant preferred an appeal against this judgment of the High
Court of Allahabad.

The SC held that as per the decisions of the SC in Dev Dutt
v. Union of India [(2008) 8 SCC 725] and Sukhdev Singh v.
Union of India [(2013) 9 SCC 566], it is mandatory that every
entry in the APAR of a public servant must be communicated to
him/her within a reasonable period. Apart from ensuring
transparency in the system, such disclosures also ensure that a
public servant is given reasonable opportunity to make
representations against the gradings if he / she is dissatisfied
with the results. Further, the Union of India had also issued
Office Memoranda on 14 May 2009 and 13 April 2010 seeking
compliance by all ministries and departments. Moreover, on 19
October 2012, a specific communication was also addressed to public
sector insurance companies.

Therefore, the SC disagreed with the reasoning given by the High
Court of Allahabad and held that non-communication of the entries
in an APAR, whether good or bad grades, is a matter in respect of
which a legitimate grievance can be made by the Appellant.
Accordingly, the SC directed the Appellant to communicate the
details of the APAR to the Respondent within a period of one month
from the date of receipt of this order.

Comment: While performance appraisals are essential for
every organisation to function efficiently, different mechanisms
are adopted by the public and private sector, respectively.
Performance appraisals in the public sector are guided by specific
procedures and directions issued by the appropriate government and
concerned departments, which are not applicable to private sector
establishments. While there have not been judicial precedents
dealing with similar issues in case of private sector employers,
private establishments may adopt performance appraisal procedures
to ensure transparency in recording and communicating the remarks
relating to an employee and conformity to the principles of natural
justice.

The content of this document do not necessarily reflect the
views/position of Khaitan & Co but remain solely those of the
author(s). For any further queries or follow up please contact
Khaitan & Co at legalalerts@khaitanco.com

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